No good deed goes unpunished: Writing off debts
In the current tragic economic climate of South Africa, largely due to the recent COVID-19 outbreak, various corporates and businesses are facing the likelihood of corporate insolvency and the effects of large debt overhangs. For many group companies, this may have resulted in increased inter-company loans and / or internal group corporate restructurings which may […]
Make sure that you are part of the group: Section 46 of the Income Tax Act
Section 46 of the Income Tax Act, 58 of 1962 (herein the ”ITA”) defines a ”Unbundling Transaction” to mean any transaction in terms whereof the equity shares in a company (usually referred to as the ”Unbundled Company”), and held by another company (traditionally the ”Unbundling Company”), is distributed by the Unbundling Company, to its shareholders, […]
Section 42 of the Income Tax Act: Navigating the legislative maze of an asset-for-share transaction
The tax relief provided for in sections 41 through to 47 of the Income Tax Act, Act 58 of 1962 (herein the ”ITA”), or rather the ‘Corporate Rules’ allows for the tax implications, normally associated with a group company restructuring to be deferred. A ‘group restructuring’ may constitute the altering or re-organising a group of […]
Anti-dividend stripping tax avoidance rules: You may need to revisit your 2019 transactions
Anti-dividend stripping tax avoidance rules: You may need to revisit your 2019 transactions On 21 July 2019, the Draft Taxation Law Amendment Bill was released, and introduced as the Taxation Law Amendment Bill, 2019 (herein the ”TLAB”) in the National Assembly by the Minister of Finance on 30 October 2019, following public comments. By […]
TAXATION LAWS AMENDMENT BILL 2017
Interest free loans or low interest loans to trusts and related companies – sec 7C revisited. In our circular dated the 10th of January 2017 we discussed the newly introduced Section 7C of the Income Tax Act, which has since been promulgated into law. We made the following statement: It seems from the wording that […]
Donations
Whether you are thinking of helping your son financially to enable him to purchase his first property or donating money towards a worthy cause, there are some things to keep in mind. A donation is defined in the Income Tax Act No. 58 of 1962 as “any gratuitous disposal of property including any gratuitous waiver […]